Scotland remains on track to produce the equivalent of 100% of its electricity consumption from renewable sources by 2020, according to a recent report by WWF Scotland.

Powering the renewables revolution

The next generation presents a unique business opportunity for Scotland to develop skills, jobs and exports in renewable technology.

Scotland’s geographical position on the North-West of the European continent coupled with a substantial coast line provides a perfect natural mix for industrial scale wind, wave and tidal energy production. According to the report, Scotland has the largest offshore renewable potential in Europe with 25% of the EU’s offshore wind and tidal power and 10% of the EU’s wave power.

The rate of expansion in this sector highlights the chance for Scotland to seize a huge economic, energy and environmental opportunity. By 2020 there is a projection that 28,000 jobs will be in the offshore renewables sector.

Large scale wind farms are coming onto the national grid stream. Last week it was announced that the world’s 3rd largest wind farm would be constructed in the Outer Moray Firth. This project will employ 4,600 people at peak of construction.

The report demonstrates an air of confidence in the renewable sector.

This progress is the result of a decade of successful cooperation between groups. The Scottish Executive set its first renewables target of 17.5% of electricity by 2010. By 2010 Scotland actually surpassed 25%.

Scotland cooperation on renewables

The WWF report is based on engagement with government, opposition parties, the renewables industry and campaign organisations. The summary states that financial support and ambitious targets were important. However, the material inputs were matched with leadership and a collaborative approach between organisations.

As the report states, the renewables industry “ticks both the economic and environmental boxes at once, while also promising the social benefits of increased employment in some of the most deprived areas of Scotland.”

While Scotland’s annual electric usage is 38,000 GWh, renewables have 200,000 GWh of potential. This provides some context of the scale of opportunities that are beginning to see development.

Planning system and financial mechanisms provide incentives for investment

Company evidence cited “a well thought-out planning system for renewables and effective financial support mechanisms as the two most important policy levers that have facilitated the successful expansion of the renewables industry.”

For this reason “total investment in the renewables sector doubled in 2012 to reach £1.5 billion and jobs in the renewables sector numbered over 11,000 in 2012. Looking forward, the offshore renewables industry is predicted to deliver 28,000 jobs by 2020, contributing £7.1 billion to the Scottish economy.”

Financial mechanisms such as ‘Renewables Obligation Scotland’ have been key.

Jason Ormiston, head of media relations for Vattenfall – the Swedish wind power company – said “foreign companies moved into Scotland…they wanted to be close to the resource and close to the market, which looked like being the fastest growing market for wave and tidal in the world…and you can’t get better incentives for that kind of investment.”

Political support generates investor confidence

Scottish MSPs from the Energy Committee visit BiFab in Fife.

This success has a political foundation. All parties and the government in Scotland have backed the renewable industry.

Investors gain confidence from knowing that “within the Scottish administration there is 100% support for the industry”. The report also highlights that “This is in stark contrast to the UK Government, whose support for a renewed gas and nuclear agenda and conflicting messages of support for renewables has only served to damage the investment environment.”

As one company said to WWF,

“The Scottish Government is strongly committed to renewable energy and its leadership in that regard is why we invest in Scotland.”

“We have chosen to develop and invest in Scotland and to open offices in Scotland because of that strong leadership.”

A crucial aspect of this political process has been target setting. Jim Mather, the former minister for energy, enterprise and tourism (2007-2011), reported that “The renewable electricity targets have acted as a positive feedback loop – they’ve raised aspirations, got investors to focus on reality and made things happen…this in turn leads to yet more success.”

While not legally binding, such targets have been significant factors in determining planning policy, funding support, economic strategies and the skills agenda. In other words, Scotland has backed the potential of renewables in principle and in practice.

The important lesson is this: economic powers have created jobs and investment in Scotland. Full economic powers can create more jobs and opportunities for Scotland’s economy.

This type of approach will be at the centre of Scotland’s economic success as an independent country.

Michael is Head of Research with Business for Scotland.
A graduate from the University of Glasgow, he has carried out a series of interviews with academics, politicians and the public in Denmark, Iceland and Ireland. Michael's on twitter @GrayInGlasgow.

Although I’m more than happy with these results, I wish that they would put more money into tidal research. Imagine the power of the Tay and Clyde Firths being harnessed. Sightless, Soundless and constant. These would make an amazing bedrock for power supplies with wind and hydro being used to pick up the slack during peak times. We are heading for a massive surplus and this can only be good for the economy and hopefully for our wallets too.

Excellent article Michael. I am fascinated by the whole concept and huge opportunity which renewables present. As we now often look to the Nordic countries for inspiration, I would hope that a true Scottish major industry can be established in this field and that for once we do not allow the big boys to come in and take over.
Here in Sweden there are several examples of successful major companies which have focused on export lead growth given the relatively small size of the domestic market. IKEA and Ericsson are two examples. More relevant to the subject is of course Danish Vestas in wind power and Swedish Vattenfall as mentioned in the article. So, come all you Scottish entrepreneurs and investors!

Ian – The Central Electricity Generating Board (CEGB) developed and installed its first wind turbine in 1982 at Carmarthen Bay, in South Wales. That had an output of 200 kilowatts but a one megawatt turbine was later built and installed at Richborough in Kent in 1989.

Sadly though the privatisation of the electricity industry killed off that development and neither the UK govt nor the “City” has made any great effort to help develop a renewables technology sector since. They prefer to do stuff like “carbon trading” which is a very “Citylike” activity.

UK R&D funding across the energy sector is the lowest of all our major competitors and unlikely to rise. The Treasury’s approach seems to be that it much prefers all technology development to be developed by others so that we can buy what we want from them when we want it using credit provided by their chums in the City.

I think therefore that the likes of Vestas, Siemens etc can rest easy in their beds. The UK is unlikely to offer them any competition.

And although I regret having to tell you this the same applies to pretty much every renewables sector and the only way to change that is to vote YES and then try to rebuild our financial sector into something that’s actually prepared to work with Govt and industry to both grow & broaden the economy.